1 in 4 UK SMEs at Risk of Cutting Staff Without Access To New Finance, Study Confirms

banking circle

Fear rises amongst SMEs’ employees as a quarter of UK small businesses would cut staff if the couldn’t access new finance to support the growth of their business, a brand-new white paper confirms. 

Lack of access to additional finance would force 25% of SMEs to let employees go. Nearly a third (30%) would have to reduce prices to encourage sales and increase cashflow, and 39% would be unable to buy the equipment the business needs, explained Anders la Cour, co-founder and Chief Executive Officer of Saxo Payments Banking Circle the company which commissioned the research. 

THE BATTLE FOR FINANCE. 92.5% of over 500 financial decision makers and directors in SMEs have accessed business finance within the past five years but many have experienced difficulties in borrowing from their usual bank.

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Source: ‘The Epic Business Loan Battle: SMEs fighting for finance’

Indeed, just 3% managed to get the finance arranged within a week. 33.3% took 1-2 weeks and 36.3% waited 3-4 weeks for the finance to be arrange.  2.1% of SMEs waited up to six months for their finance – a small percentage, but representing almost 120,000 businesses across the UK.

SMEs with 10-49 employees are the least satisfied with their current banking relationships.

THE BIGGEST CONCERN. Interest rates and fees were the biggest concern, with 58% saying they would consider finance from a non-bank if it offered lower interest rates.  44% would do so for lower arrangement fees. 25% would be attracted to a non-bank by simple online account management.

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